Industrial Organization Theory

2022/2023

Academic Year

RUS

Instruction in Russian

3

ECTS credits

Delivered by:

Department of Applied Economics

Type:

Mago-Lego

When:

2 module

Instructor

Yusupova, Gyuzel F.

Программа дисциплины

Аннотация

The course introduces the theory of industrial organization (IO) which focuses on the business behavior of firms, its implications for industry structures, and policies of industry regulation. More broadly, we look at the imperfect competition and strategic interactions of firms in different sectors and explain differences across industries. Among possible strategies, we will discuss pricing and production strategies; competition in innovations and cooperation in R&D; informative and persuasive advertising strategies; various anticompetitive practices: collusion, retail price maintenance, price discrimination, tying, exclusive clauses, predatory behavior and entry deterrence. You will become familiar with the main (static and dynamic) models of monopoly and oligopoly, horizontal and vertical product differentiation, models of asymmetric information. Moreover, we will analyze the industry structure and performance. You will study how to measure the market concentration and relate it to the level of competition. Particular emphasis will be given on the determinants and consequences of vertical and horizontal mergers. Throughout the course, we will always discuss possible ways of market regulation and related antitrust policies.

Цель освоения дисциплины

• You will become familiar with the most important models of the industrial organization for understanding strategies chosen by firms to acquire and maintain market power.
• This course improves your (micro-)economic reasoning and modeling skills, which, in particular, can be useful for writing your term papers and Bachelor theses involving analysis at the firm or industry level.

Планируемые результаты обучения

• Ability to model advertising choices. Understanding of consequences of advertising.
• Ability to model pricing decisions and distinguish different types of price discrimination.
• General knowledge about antitrust and competition policy.
• Good understanding of the Hotelling model and differences between address and non-address approached to differentiation modeling.
• Learning different techniques to reach vertical integration outcomes without vertical integration.
• Learning different ways to signal quality and understanding of distortions that come with uncertainty. Understanding of the basics of consumer search.
• Learning of the basics of merger analysis.
• Learning the basics of collusion, incentives to collude and sustainability of collusion.
• Learning the basics of R&D decisions and regulation of patents.
• Review of perfect competition, a good understanding of the basics.
• Review of the basics of game theory. Ability to find NE, SPNE and PBNE.
• Understanding of differences of quantity and price competition, very good understanding of the basic homogenous good models.
• Understanding of the basic questions asked in IO. Learning the history of IO.
• Understanding of the consequences of the presence of network effects, the ability to apply this knowledge to the modeling of markets with network effects.
• Understanding of the entry deterrence and entry accommodation strategies and their implication for the market equilibrium outcomes. Understanding how to define the market and measure concentration.

Содержание учебной дисциплины

• Introduction
• Review of perfect competition and monopoly
• Review of game theory
• Pricing strategies
• Static oligopoly
• Dynamic oligopoly and collusion
• Product differentiation
• Advertising
• Patents and R&D
• Imperfect information
• Network effects
• Vertical relations
• Mergers
• Entry and market structure
• Antitrust

Элементы контроля

• Quiz
  Every week, there will be a short online quiz which is aimed to test understanding of the basic concepts discussed in the previous lecture
• Homeworks
  The content of homework assignments will be mainly problem-solving. There are 5 small homework assignments.
• Group presentation
  20-minutes presentation of one theoretical or empirical IO paper during the seminar.
• Essay
  Essay on the same paper as presented in the class.
• Exam
  The final written exam consists of three parts: 20 true/false questions, 3 open questions related to the practical application of IO for industry analysis, and 2 theory problems.
• Quiz
  Every week, there will be a short online quiz which is aimed to test understanding of the basic concepts discussed in the previous lecture
• Homeworks
  The content of homework assignments will be mainly problem-solving. There are 5 small homework assignments.
• Group presentation
  20-minutes presentation of one theoretical or empirical IO paper during the seminar.
• Essay
  Essay on the same paper as presented in the class.
• Exam
  The final written exam consists of three parts: 20 true/false questions, 3 open questions related to the practical application of IO for industry analysis, and 2 theory problems.

Промежуточная аттестация

• 2022/2023 учебный год 2 модуль
  0.25 * Homeworks + 0.1 * Quiz + 0.15 * Essay + 0.1 * Group presentation + 0.4 * Exam

Список литературы

Рекомендуемая основная литература

• Belleflamme, P., & Peitz, M. (2010). Industrial Organization : Markets and Strategies. Cambridge, UK: Cambridge eText. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=324082
• Oz Shy. (1996). Industrial Organization: Theory and Applications. The MIT Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.mtp.titles.0262691795

Рекомендуемая дополнительная литература

• Industrial organization : a strategic approach, Church, J., 2000
• Microeconomic theory, Mas-Colell, A., 1995

Авторы

• Казакова Екатерина Александровна